Look at the headlines of big business sales
like WhatsApp’s $19 Billion sale to Facebook
last week and you know that 2014 is a time of
unprecedented opportunity. You have access
to nearly everything around the globe thanks
to the beauty and speed of technology and
you can learn almost anything online. With
all this access to information, many are
wondering if college is still the speedway to
success. Stay in school or dropout? Some
entrepreneurs are turning to the latter.
Take for instance the most recent Forbes
Billionaire List , which ranks the top 400
wealthiest people in the world. Of the 400
ranked individuals, 63 were college dropouts.
The co-founder of WhatsApp Jan Koum will
most likely make the 2015 list -- and he too
was a college dropout. Koum’s sparse and
self-deprecating LinkedIn profile reveals he
"did some work" for Yahoo, "barely graduated"
from high school in 1995 and "dropped out" of
San Jose State University.
Why are people choosing to go the dropout
path? Well, another billionaire dropout, Sean
Parker may shed some light on this trend.
“When these incredible tools of knowledge
and learning are available to the whole world,
formal education becomes less and less
important, Parker told Forbes. "We should
expect to see the emergence of a new kind of
entrepreneur who has acquired most of their
knowledge through self-education.
It’s easy to look at all those zeros and commas
and think you’d like to be the next Koum or
Parker.
Before you do, you should consider some dos
and don’ts of dropping out of college to do a
startup.
Do ask yourself about your motivation. So
you think college is a waste of your time and
money…why? What seems to be clear in the
billionaire dropout success stories is that
there was a burning desire and passion
behind the entrepreneur’s decision.
Zuckerberg was already blowing the lid off of
his early Facebook idea when he dropped.
Michael Dell was shipping computer kits with
backorders when he left college. The desire
was there to continue something that had
already started and for most of these people,
it started in college.
This is not to say that’s always the case. For
instance, look at Ray Kroc of McDonalds or
Debbie Fields of Mrs. Fields cookies. Both had
no college or formal business education but
went on to form very successful companies.
There’s nothing saying you can’t drop out and
be successful but be willing to ask yourself
the right questions first.
Why do I want to leave? What’s my burning
desire that I’m already working on? How am I
already performing in my business (or
education)? Past performance is a good future
indicator. If you don’t have the stomach for
well-timed risk, discipline to hustle, stamina
to persevere and strength to innovate, you
may want to consider the formalized
boundaries of college to help you develop
those skills before cutting your teeth on a
startup as a dropout
Don’t use your university resources. Let’s
say you’re already attending a university and
you’ve asked yourself the tough questions but
have enough personal empirical data to back
your position up. Remember that when you
leave school, you’ll need to consider the
ethics of hanging up your associations with
the school’s resources too. Leaving campus
means you’ll need to represent yourself
honestly to the public. Don’t use your school-
generated email to try to seek access to
resources or people that you wouldn’t
otherwise be privy to.
For example setting up meetings with clients
who share your alumni or pressing for
internships when you’ve dropped out. If you
are considering ditching the education route
and aren’t able to join a university organized
internship, try mentoring as an alternative
option. Offer to apprentice or assist a mentor
in exchange for his or her tutoring and help.
In effect that’s the true essence of an
internship anyway and you may get even more
real-world experience working one-on-one with
a mentor.
Something else to avoid if you decide to
dropout is using your Student ID to gain
access to school property, computer labs,
sporting events or other entitlements of
school enrollment. If you don’t have the tools
you need to succeed in your startup without
utilizing school property, you will need to get
creative in finding resources. Consider looking
into shared workspace options which can keep
the overhead of an office low, but still give
you dedicated, professional space for working.
Options like Sharedesk and Nextspace offer
flexible office resource space for shoestring
budgets.
Do talk through your plan with your
family. Discussing your dropout plans with
your family is important for many reasons. It
helps you formalize your plan with older,
experienced people that you know and trust.
They can help you see blind spots in your
ideas and support you through the process.
Being honest about your decision to dropout
shows maturity and courage on your part,
while being dishonest with your family and
concealing your plans to skip college shows
irresponsibility. You will also likely need your
loved ones support, both emotionally and
financially, at certain times during your
startup experience, so having their backing is
important.
Despite the drive and undeniable genius of
Bill Gates, even he needed his family’s
support during tough times in the startup
world after dropping out of college. The family
support was one reason Gates decided to
move Microsoft to Seattle, where he settled
into a house close to his parents. His mom
helped arrange a maid to clean for him and
his father helped guide Microsoft as a startup
with his own experience as a lawyer guiding
small companies.
Don’t commit fraud with your student
loans. One of the biggest challenges startups
face is money. It’s challenging to get
investment capital, particularly so if you’re
unproven and now, a college dropout. It’s
tempting to take your student loan deposit for
the semester and then stop going to class to
use that cash for startup capital. However,
according to the Federal Student Aid
handbook, “You may use the money you
receive only to pay for education expenses at
the school that awarded you your loan.
Education expenses include such school
charges as tuition, room and board, fees,
books, supplies, equipment, dependent child
care expenses, transportation, and rental or
purchase of a personal computer.”
While you may be able to “get away” with
using your student loan money for a semester
or two after dropping out for your own living
expenses and needs, this is not an ethical or
intended purpose for the money. Your loans
won’t be renewed and will likely go into
repayment -- meaning loan payments will be
added to your monthly business and living
expenses.
Borrowing money from your student loan to
fund your life or business as a startup is not
an intelligent business decision. Far better to
start your business on the side, while still
attending school or to leave school and get
your funding through an angel investor or
kickstarter campaign. In fact, a crowdfunding
campaign for your product idea might be a
great way to test the water before you leave
(or decide to skip) college.
There are plenty of reasons to argue the need
for education or the benefits of dropping out
to pursue your entrepreneurial path.
Whichever route you decide, the most
important decision is to commit to yourself
with an honest assessment of your skills,
aptitude and drive. Both roads will have their
rewards and challenges, but it’s up to you to
make the decision that best fits your ability to
succeed.
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